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The International Energy Agency has released its World Energy Outlook for 2010, forecasting for the first time that the global crude oil production peak that so many have long feared, has in fact already been reached—more than four years ago. International demand has since fallen slightly thanks to a recent global economic downturn, but once economies around the world have recovered, the IEA says daily crude production alone will no longer be sufficient to meet their needs.

So is the world is headed for a Mad Max-style apocalypse? Not according the IEA. The 2010 report projects that increases in other fossil fuels like natural gas and tar sands will mostly supplant crude in meeting new demand—with clean, renewable energy sources also making major gains.

The IEA says that daily global oil production will “plateau” at around 68 million barrels per day by 2035, as total energy demand increases by more than 35 percent over the same period. Thanks in part to pledges from governments to reduce their countries’ reliance on fossil fuels though, new contributions to the energy mix will help to avert the sort of catastrophic oil spike that many have predicted to coincide with the start of the “peak oil” age.

Apocalypse Later

But while the projection may bode well for the world economy, the IEA is convinced that even if governments live up to the pledges they made in lowering greenhouse gas emissions, the 2009 Copenhagen Accord’s goal of limiting climate change to less than 2°C will not be reached. If the world continues on its current trajectory, the organization says that average global temperatures will likely rise by at least 3.5°C.

The group recommended that the following conditions must be met to achieve the Copenhagen Accord’s intended outcomes, which it calls the “450 Scenario:”

Oil demand must peak sooner and decline more sharply than it would under natural “peak oil” conditions.

Coal will have to play a significantly smaller role in the energy balance, with global demand peaking in 2020 and declining steadily thereafter.

Demand for gas and liquified natural gas must also also peak before the end of the 2020s.

Renewables and nuclear power must double to represent nearly 40 percent of the energy market by 2035.

Advanced vehicles will also have to make rapid gains in the coming years—to levels in the upper reaches of what most analysts believe is possible. By 2035, the IEA says that not only will 70 percent of new worldwide vehicle sales will have to come from advance technology plug-in hybrid and electric vehicles, but that that those cars will need to run mostly on electricity generated from nuclear and renewable sources rather than fossil fuels.

The IEA’s Outlook is considered by many to be one of the most comprehensive and authoritative annual energy market analyses available to the public. (Though last year’s report came under fire after the agency was accused in The Guardian of downplaying the severity of the impending oil crunch in an effort to not “anger the Americans.”)

The IEA has worked independently with the United States and 27 other member countries to help minimize the fallout from energy market instabilities since 1974, when it was created in response to the 1973 oil crisis. Its current mandate is the promotion of what it describes as “the three E’s”: energy security, economic development, and environmental protection.

All the oil companies and natural gas companies sky rocketed the price on their crude and gas because they now the end is just around the corner and they are trying to get all out of it that they can. They are trying to milk the cow dry before the world changes its energy grid.

The world needs the super powers to stop dragging their heels and start mass producing electric cars, trains, planes, boats, and Geothermal Power Plants, solar panels, and wave energy to lessen the impact on oil and natural gas so we can use our natural fossil fuels for more productive purposes. We are loosing the war on global warming, the cut down on global pollutions, and dangerous nuclear waste when we burn our fossil fuels for energy.

JamesDavis

All the oil companies and natural gas companies sky rocketed the price on their crude and gas because they now the end is just around the corner and they are trying to get all out of it that they can. They are trying to milk the cow dry before the world changes its energy grid.

The world needs the super powers to stop dragging their heels and start mass producing electric cars, trains, planes, boats, and Geothermal Power Plants, solar panels, and wave energy to lessen the impact on oil and natural gas so we can use our natural fossil fuels for more productive purposes. We are loosing the war on global warming, the cut down on global pollutions, and dangerous nuclear waste when we burn our fossil fuels for energy.

Anonymous

What took IEA 4 years to say this while the independent groups like Peakoil.net and oildrum.com could say this much earlier. Probably they dont want to say.

The oil companies claim that the World Oil Supply is 86 million b/d, but thats after including Natural Gas Liquids (Ethane, Propane, Butane) which is 8 million b/d, Bio-fuels which is 2 million b/d and synthetic and polar oil which is rest.

If we take the crude oil alone then its only 73 million b/d and the peak was hit in 2005. Peakoil has already made an impact on advanced countries. US auto sales which used to be more than 16 million is now only 12 million.

No wonder, many countries are moving towards alternative fuel vehicles. Worldwide there are
18 million flex-fuel vehicles
14 million LPG
12 million CNG
3 million Hybrids

Also the countries like Russia, Japan, Korea which use Oil for power generation are moving to oil fuels like Natgas, nuclear, coal, wood, etc. US has already done this smartly.

Pretty soon, Coal will be largest source of energy, but IEA does not want to say this.

In another front, price of solar photovoltaic panel price is dropping rapidly and now it stands at $3.51 / watt.http://www.solarbuzz.com/

But in transport sector alone, Oil will continue to increase.

Anonymous

Because of Peakoil and rising gas prices, cars have gotten smaller.
Lincoln which used to sell vehicles with V8 engine has started selling a car with V4 engine that gives 41 MPG (MKZ).

And Prius is launching 2 more hybrid models. Lets hope our Oil consumption goes down with all these vehicles

Capt. Concernicus

This is why I have a Prius. Great gas mileage and buys me time until EV’s become capable of doing everything the Prius can. That is haul 4 or 5 people, charge as quickly as I can refill the Prius at a gas station, have the driving range of the Prius (450 miles) and cost as much as the Prius (~25k) without tax rebates.

Anonymous

I think Peak Coal is also very close as China has started importing lots of them.

Good news is that this year, Solar Power is rising much faster.
If the cost of Solar & Wind decreases while the Coal & Oil increases, the parity will be hit in next 4 – 5 years.

BigWu

Ian,

The difference is that the IEA’s report is not a future prediction of Peak Oil, it’s an acknowledgment that we’ve already passed the peak: it’s a done deal.

The data doesn’t lie, 2006 was the peak. Crude production is now, and has been, in decline (for four years now).

The only question, which the IEA report focuses on, is what the market clearing price will be going forward. Since supply is and will continue to fall, gently at first, then more steeply as the years progress, the price will be determined by the demand side of the equation.

If the US goes the way of the EU and Japan and rapidly increases fleet efficiency, oil prices may remain relatively affordable (under $120/bbl). The good news on this front is that the industrialized nations have all mandated steep efficiency gains, including the US and China, of 35 MPG or better. This will definitely help keep pump prices in the US within the $4-5 range for some time.

Manufacturers are absolutely taking the queue, with dramatic increases in efficiency for all vehicle types and sizes. In the out years though, a dramatic shift away from oil will be needed or pump prices will be economically ruinous.

Roy_H

I can’t believe that the world’s governments aren’t pursuing LFTRs. Liquid Flouride Thorium Reactors were invented in the 1960s at Oak Ridge National Laboratory. They ran one for almost 5 years. LFTRs use cheap thorium, are inherently safe, do not produce long term radio-active waste and were abandoned because they are not suitable for making bombs. See:http://www.youtube.com/watch?v=WWUeBSoEnRk
andhttp://energyfromthorium.com/
Although the principles are proven, there is still some research required for the best materials to have long 50 year plus life. This should be our highest priority to solve our energy and pollution problems.